REIT to transfer properties from provider after failed rent payments

The trading update also expressed concern about the solvency of another lessee, My Space Housing. 

The Regulator of Social Housing (RSH) downgraded the lease-based provider to the lowest possible viability and governance grades after its failure to provide evidence was branded “unacceptable” in 2022. 

In December, Triple Point said it was “actively looking to move properties away from My Space to alternative housing providers”, but noted the regulator’s request that My Space consider, among other things, the option of a business combination or merger which might negate the need to move properties. 

However, in the trading update on Friday, Triple Point said it “continues to make progress” with the provider where it is “supporting the management team in delivery of its turnaround plan and rent payments are increasing”.

Instead, it said it was transferring properties from Parasol after the shareholder consultation. 

According to the update: “The company will now look to transfer all 38 properties currently leased to Parasol (representing 8.1% of the company’s gross asset value and 9.7% of the rent roll) to Westmoreland Housing Association.

“The welfare of residents is a key priority for the group and, therefore, the transfer will involve a tenant consultation process. 

“Subject to this tenant consultation process and support from various stakeholders, the transfer to Westmoreland is expected to be completed before the announcement of the company’s half-year results for the period to 30 June 2024, which are expected to be released in September 2024.”

Triple Point currently has no properties leased to Westmoreland.

But according to the update, it has spent “several months engaging with and undertaking due diligence” on Westmoreland to “determine their suitability to take on the properties currently leased to Parasol”. 

“Westmoreland benefits from a strong board made up of six independent board members and the CEO. 

“The organisation has a high-quality management team and generates a recurring annual surplus. 

“Following the transfer of the properties to Westmoreland, the board expects rent collection to increase from its current levels,” the update said. 

Westmoreland said it was “pleased to confirm that we have provisionally agreed with Triple Point Social Housing REIT, to manage a portfolio of specialised supported housing properties”. 

A spokesperson said: “Our priority is to deliver excellent outcomes for clients through high-quality customer and property services. 

“The proposed move supports Westmoreland’s strategic aims and is another step forward in our journey to full regulatory compliance. 

“We put our customers at the heart of everything we do and we will be embarking on a full customer consultation at the start of this project and we will be engaging with all stakeholders throughout the process.”

Inside Housing has contacted all organisations for comment. 

In March, it emerged that Home REIT had sold off 63 properties as it pressed on with plans to reduce its debts.